Cyprus Merchandise Trade Balance (EUR bn)

A second estimate confirmed that annual economic growth slowed in Q4. The deceleration was broad-based, with private consumption, public spending, fixed investment and exports detracting from the reading. Shifting to this year, available data points to resilient activity. Retail sales growth accelerated in year-on-year terms in January, while economic sentiment rose to a one-year high in February. Moreover, tourist arrivals expanded at a brisker annual pace in January–February relative to Q4. In other news, on 10 March, Fitch upgraded the country’s rating to ‘BBB’ from ‘BBB-’ with a stable outlook. The agency highlighted that the fiscal deficit and public debt were declining. Notably, Fitch does not foresee substantial changes in economic policy under the new government.